Quarterly report pursuant to Section 13 or 15(d)

Lessee Leases

v3.22.2
Lessee Leases
 6 Months Ended
Jun. 30, 2022
Leases [Abstract]  
Lessee Leases

Note 6 – Lessee Leases

 

Operating leases are comprised of office space and office equipment leases. Fleet leases entered into prior to January 1, 2019, are classified as operating leases. Fleet leases entered into on or after January 1, 2019, under ASC 842 guidelines, are classified as finance leases.

 

Gross right of use assets recorded under finance leases related to WCI vehicle fleet leases were $994,515 and $882,081 as of June 30, 2022 and December 31, 2021, respectively. Accumulated amortization associated with finance leases was $334,940 and $236,470 as of June 30, 2022 and December 31, 2021, respectively.

 

Lease costs recognized in our consolidated statements of operations is summarized as follows:

 

    2022     2021     2022     2021  
    Three Months Ended June 30,     Six Months Ended June 30,  
    2022     2021     2022     2021  
Operating lease cost included in cost of goods   $ 7,964     $ 29,837     $ 13,054     $ 62,701  
Operating lease cost included in operating costs     7,200       13,496       14,700       24,592  
Total operating lease cost (1)     15,164       43,333       27,754       87,293  
Finance lease cost, included in cost of goods:                                
Amortization of lease assets     47,416       38,952       98,469       51,586  
Interest on lease liabilities     6,929       6,363       14,487       11,830  
Total finance lease cost     54,345       45,315       112,956       63,416  
Short-term lease cost     -       -       -       2,300  
Total lease cost   $ 69,509     $ 88,648     $ 140,710     $ 153,009  

 

  (1) Right of use asset amortization under operating agreements was $12,488 and $26,558 for the three months ended June 30, 2022 and 2021, respectively. Right of use asset amortization under operating agreements was $25,634 and $67,539 for the six months ended June 30, 2022 and 2021, respectively.

 

Other information about lease amounts recognized in our condensed consolidated financial statements is summarized as follows:

 

    June 30,
2022		     December 31,
2021		  
Weighted-average remaining lease term – operating leases     0.63 years       0.95 years  
Weighted-average remaining lease term – finance leases     3.68 years       3.83 years  
Weighted-average discount rate – operating leases     4.23 %     5.7 %
Weighted-average discount rate – finance leases     4.94 %     3.8 %

 

Finance lease liabilities were as follows:

 

    June 30,
2022		     December 31,
2021		  
Gross finance lease liabilities   $ 650,569     $ 634,192  
Less: imputed interest     (53,694 )     (51,212 )
Present value of finance lease liabilities     596,875       582,980  
Less: current portion     (180,700 )     (167,515 )
Long-term finance lease liabilities   $ 416,175     $ 415,465  

 

Operating lease liabilities were as follows:

 

    June 30,
2022		     December 31,
2021		  
Gross operating lease liabilities   $ 21,072     $ 55,865  
Less: imputed interest     (400 )     (8,832 )
Present value of operating lease liabilities     20,672       47,033  
Less: current portion     (20,672 )     (42,058 )
Long-term operating lease liabilities   $ -     $ 4,975  

 

 

Note 6 – Lessee Leases (continued)

 

Lease maturities were as follows:

 

Maturity of lease liabilities

 

12 months ending June 30,   Finance leases     Operating leases  
2022   $ 180,700     $ 20,672  
2023     158,960       -  
2024     145,598       -  
2025     90,087       -  
2026     21,530       -  
Total     596,875       20,672  
Less: Current maturities     (180,700 )     (20,672 )
Long-term liability   $ 416,175     $ -